Zero-Hour Contracts In The Franchising World

Franchises that employ workers on zero-hour contracts are facing calls from politicians and the general public to change their policies. However, do these agreements give employees a raw deal or keep the jobs market flexible?

McDonald's has faced public pressure to change their typical employment offering which gives a contract without a guaranteed work structure. On this scheme, employers are not obliged to offer workers any working hours at all, giving businesses far greater flexibility – and reduced wage bills.

Business Secretary Vince Cable told The Independent: “There has been anecdotal evidence of abuse by certain employers – including in the public sector – of some vulnerable workers at the margins of the labour market.”

Herein lies the issue with a zero-hour contract. As there are no guaranteed hours, there is no guarantee of payment for employees desperate for work. The system, as it is, is easy for some unscrupulous employers to abuse.

McDonald's, in particular, has been criticised as some national newspapers have reported that 90 per cent of their UK workforce are signed onto a zero-hour contract. However, the fast-food giant takes pride in its progressive employment structure.

Other franchises, such as SUBWAY, use similar policies and some economists have voiced their opinions that these employment contracts have their place in the labour market.

John Cridland, Director General of the Confederation of Business Industry (CBI), believes that these contracts keep people in employment and away from benefit culture. He told The Financial Times: “These contracts play a vital role as a way of keeping people in employment. If we hadn’t had this flexible working when the economy contracted, unemployment would have topped 3 million and it didn’t.”

Generally, zero-hour contracts make it harder for employees to get a routine and regular shift pattern. While this flexibility suits some, for many it means getting a mortgage or buying a car is almost impossible.

As the economy looks to be recovering amid reports of substantial gains for the pound, jobs may well become more readily available. Right now employers should weigh up the fairness of their employee’s contracts. An employee is a representative of a company, a badly treated one therefore, will only reflect badly on the business as a whole.

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